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There are different types of
insurance that you can take out on your home and mortgage. As with trying to
find your actual mortgage you should shop around for any insurance you take out
– there are some good deals, and some very poor ones too that should be
avoided.
You’ll probably find that your bank/mortgage provider
will try to get you to take out a policy with their own company – while they
may push it hard, it’s often not the best deal available so shop around on the
internet and you’ll probably be able to save yourself quite a bit of money.
 
Buildings And Contents Insurance
– You’ll want to insure your home and its contents against damage. It’s
important to get it right when estimating how much mortgage insurance coverage you will need – you
don’t want to pay for excessive coverage, and neither do you want
to underinsure yourself in case of any losses.
Look at your possessions – do you
have any antiques that need extra protection? What type of furniture do you
have? How much would all of it cost to replace? Shop around on the internet to
find some great deals and you’ll save yourself thousands in the process (as
opposed to signing up to whatever your mortgage provider is trying to push on
you).
Mortgage Payment Protection
Insurance – this type of insurance protects you against any loss of income
that may affect your ability to make your mortgage payments. This can be an
important coverage, especially if you do not have the cashflow to make mortgage
payments due to unemployment or disability.
The two important things to look out
for are (1) when the insurance payment starts after your loss of income (for
example, is it 30 or 60 days?) and (2) how long are you covered for (you can
often get 12 to 24 months coverage).
As with most mortgage insurance types, these
vary widely so make sure you shop around online and get the best deal for you.
Mortgage Life Insurance – With this
type of insurance, should you die your dependents will receive a sum of cash to
replace a part or the full amount of your earning power. If you’re single then
this is coverage that you don’t really need – but if you have children who depend on you putting food on the table and a roof over your head,
it may be coverage that you should seriously consider.
Mortgage Protection Decreasing
Term Insurance – This is a unique type of coverage where as the amount
owed on your mortgage decreases over time, so do your insurance payments. The
logic is that as your mortgage decreases, you need less to cover it should
anything bad happen – so the insurance should also cost less.
Mortgage Disability Insurance – As
you might think, disability/critical illness insurance protects you in the event that you
develop a very serious injury or illness (the types of illnesses covered are pre-set in the
policy).
Standard Illness Coverage – Also known as permanent health insurance, this type of
policy covers you against most types of illnesses (typically you can expect 50%
of yor income to be paid out until recovery).
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